New Jersey loses $10b as residents move out
Thursday, 11 October 2007
TRENTON, New Jersey, Oct 10 (Bloomberg): New Jersey's loss of residents to other US states more than tripled between 2002 and 2006, draining $10 billion in personal income from the economy and reducing tax revenue by $680 million, according to a Rutgers University report.
The number of people who left New Jersey exceeded those who moved in from other parts of the nation by 72,547 last year, the report by two Rutgers economists said. While there is no one reason for the losses, the state's high costs, including housing, and improved economic opportunities elsewhere are possible explanations, the report said.
Unless New Jersey can reverse its population trend, the state's fiscal crisis will persist, said James Hughes, dean of Rutgers's Bloustein School of Planning and Public Policy in New Brunswick and co-author of the report. Treasury officials said yesterday that New Jersey faces a shortfall that may exceed $3 billion in the coming fiscal year.
"It's worrisome,'' said Hughes, who wrote the population report with Professor Joseph Seneca. ``When you are talking about $10 billion less in income and $680 million in income and sales taxes, it's going to be very hard to balance the state's budget.''
The Rutgers report, released today, aimed to find whether statistical evidence would confirm anecdotal reports that New Jerseyans were "selling their homes, cashing out, and moving to lower-cost, more-affordable states,'' or "establishing permanent residence in low-tax states while continuing to maintain a New Jersey domicile.''
The economists said New Jersey's net migration loss, the deficit in the number of residents moving in from other states compared with those leaving for elsewhere in the country, is the fourth-highest in the US, trailing only California, New York, and Louisiana.
The figures don't reflect people moving in and out of the state from other countries, who have sustained New Jersey's population, along with a birth rate that has exceeded deaths. The state's annual population growth has declined every year since 2002. If the trend continues, New Jersey would start to experience an overall decline by 2008, Hughes said.
New Jersey, the most-densely populated US state, is the only one to have more than 1,000 residents per square mile. During the first half of 2006, the state dropped out of the top-10 ranking of states based on total population. North Carolina moved up to 10th place, while New Jersey fell to 11th.
Between 2000 and 2006, North Carolina gained 807,000 people, while New Jersey gained 310,000. North Carolina was one of the top destination states of New Jersey residents who moved out, according to the study. North Carolina had a net migration gain of more than 100,000 people last year.
While New Jersey has the second-highest median household income in the nation after Maryland, at $64,470, it also ranks second in the nation in housing costs to California. New Jersey residents pay the highest property taxes in the nation.
"A substantial part of the state's income advantage is consumed by much higher housing costs,'' the report said.
New Jersey is a "dense, congested, mature and costly-to- build-in environment,'' the economists wrote. About 20 per cent of New Jersey's housing was built in 1939 or earlier, compared with 15 per cent for the nation and 6.8 per cent for North Carolina, according to the report.
The number of people who left New Jersey exceeded those who moved in from other parts of the nation by 72,547 last year, the report by two Rutgers economists said. While there is no one reason for the losses, the state's high costs, including housing, and improved economic opportunities elsewhere are possible explanations, the report said.
Unless New Jersey can reverse its population trend, the state's fiscal crisis will persist, said James Hughes, dean of Rutgers's Bloustein School of Planning and Public Policy in New Brunswick and co-author of the report. Treasury officials said yesterday that New Jersey faces a shortfall that may exceed $3 billion in the coming fiscal year.
"It's worrisome,'' said Hughes, who wrote the population report with Professor Joseph Seneca. ``When you are talking about $10 billion less in income and $680 million in income and sales taxes, it's going to be very hard to balance the state's budget.''
The Rutgers report, released today, aimed to find whether statistical evidence would confirm anecdotal reports that New Jerseyans were "selling their homes, cashing out, and moving to lower-cost, more-affordable states,'' or "establishing permanent residence in low-tax states while continuing to maintain a New Jersey domicile.''
The economists said New Jersey's net migration loss, the deficit in the number of residents moving in from other states compared with those leaving for elsewhere in the country, is the fourth-highest in the US, trailing only California, New York, and Louisiana.
The figures don't reflect people moving in and out of the state from other countries, who have sustained New Jersey's population, along with a birth rate that has exceeded deaths. The state's annual population growth has declined every year since 2002. If the trend continues, New Jersey would start to experience an overall decline by 2008, Hughes said.
New Jersey, the most-densely populated US state, is the only one to have more than 1,000 residents per square mile. During the first half of 2006, the state dropped out of the top-10 ranking of states based on total population. North Carolina moved up to 10th place, while New Jersey fell to 11th.
Between 2000 and 2006, North Carolina gained 807,000 people, while New Jersey gained 310,000. North Carolina was one of the top destination states of New Jersey residents who moved out, according to the study. North Carolina had a net migration gain of more than 100,000 people last year.
While New Jersey has the second-highest median household income in the nation after Maryland, at $64,470, it also ranks second in the nation in housing costs to California. New Jersey residents pay the highest property taxes in the nation.
"A substantial part of the state's income advantage is consumed by much higher housing costs,'' the report said.
New Jersey is a "dense, congested, mature and costly-to- build-in environment,'' the economists wrote. About 20 per cent of New Jersey's housing was built in 1939 or earlier, compared with 15 per cent for the nation and 6.8 per cent for North Carolina, according to the report.